Republic of the Philippines

Posed for resolution before the Court in this petition for review on
certiorari filed under Rule 65 of the Rules of Court is the sole issue of
whether the Regional Trial Court committed grave abuse of discretion
amounting to lack or excess of jurisdiction in affirming in toto the decisions
made by the French court without trying anew the merit of the case.
The facts of the case are as follows:
On April 6, 2010, Defendants, Henry Hito and William Labi, residents of
Centro East, Santiago City and trading as co-partners in Paris under the
firm name of A.T. Stewart & Co. were sued in France for debts due to a
French firm, Charles Fortich & Co.

On August 15, 2012, Gustave Guyot, a liquidator of the French firm, sued
Henry Hito and William Labi on the French judgment before the Regional
Trial Court of Santiago City seeking an amount totaling over
P1,950,000.00.
On November 30, 2012, Judge Pacifico Palaspas of the Regional Trial Court
of Santiago City held the judgment of the French court conclusive and
entered a decree in favor of the French firm without examining anew the
merits of the case.
Defendants question this decree on many grounds, foremost of which was
that French courts gave no force and effect to the duly rendered judgment
of the Philippine courts against French citizens.
The main issue in this case before this court as submitted by the herein
petitioner Henry Hito under Rule 65 of the Rules of Court, to wit:
Whether or not the Regional Trial Court acted without or in excess of
its jurisdiction in affirming in toto the decisions made by the French court
without trying anew the merit of the case.
To resolve this question, a proper understanding is required on the nature
and effects of a foreign judgment in this jurisdiction.
The rules of comity, utility and convenience of nations have established a
usage among civilized states by which final judgments of foreign courts of
competent jurisdiction are reciprocally respected and rendered efficacious
under certain conditions that may vary in different countries. This principle
was prominently and expressly recognized in our jurisprudence beginning
with Ingenholl v. Walter E. Olsen & Co. The conditions required by the
Philippines for recognition and enforcement of a foreign judgment were
originally contained in Section 311 of the Code of Civil Procedure, which
was taken from the California Code of Civil Procedure which, in turn, was
derived from the California Act of March 11, 1872. Remarkably, the
procedural rule now outlined in Section 48, Rule 39 of the Rules of Civil
Procedure has remained unchanged down to the last word in nearly a
century. Section 48 states:
SEC. 48. Effect of foreign judgments. 'The effect of a judgment of a
tribunal of a foreign country, having jurisdiction to pronounce the
judgment is as follows:
(a) In case of a judgment upon a specific thing, the judgment is conclusive
upon the title to the thing;
(b) In case of a judgment against a person, the judgment is presumptive
evidence of a right as between the parties and their successors in interest by
a subsequent title;
In either case, the judgment or final order may be repelled by evidence of a
want of jurisdiction, want of notice to the party, collusion, fraud, or clear
mistake of law or fact.
There is an evident distinction between a foreign judgment in an action in
rem and one in personam. For an action in rem, the foreign judgment is
deemed conclusive upon the title to the thing, while in an
action in personam, the foreign judgment is presumptive, and not
conclusive, of a right as between the parties and their successors in interest
by a subsequent title. However, in both cases, the foreign judgment is
susceptible to impeachment in our local courts on the grounds of want of
jurisdiction or notice to the party, collusion, fraud, or clear mistake of law
or fact. Thus, the party aggrieved by the foreign judgment is entitled to
defend against the enforcement of such decision in the local forum. It is
essential that there should be an opportunity to challenge the foreign
judgment, in order for the court in this jurisdiction to properly determine
its efficacy.
It is clear then that it is usually necessary for an action to be filed in order
to enforce a foreign judgment, even if such judgment has conclusive effect
as in the case of in rem actions, if only for the purpose of allowing the losing
party an opportunity to challenge the foreign judgment, and in order for the
court to properly determine its efficacy. Consequently, the party attacking a
foreign judgment has the burden of overcoming the presumption of its
validity.
Since the judgment made by the foreign court is a judgment in an action in
personam, the judgment has only a presumptive and not conclusive
evidentiary value, therefore, rebuttable, and the decree made by the
Regional Trial Court of Santiago in affirming in toto the decision of the
French court was erroneous. The herein petitioners should be given an
opportunity to present evidence to rebut such presumptions as enshrined
under due process clause.
WHEREFORE, the petition is granted and the decision made by the
Regional Trial Court of Santiago City dated November 30, 2012 is hereby
reversed and the case be remanded to said court to proceed upon the merits
of the case.

A T T E S T A T I O N
I attest that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the
Court’s Division.

FRITZGERALD ACE S. PALAC
Associate Justice
Acting Chairperson
C E R T I F I C A T I O N
Pursuant to Section 13, Article VIII of the Constitution, and the Division
Chairperson’s Attestation, I certify that the conclusions in the above
decision had been reached in consultation before the case was assigned to
the writer of the opinion of the Court’s Division.
WILLIE JAMES QUITORIANO
Acting Chief Justice